BANGALORE: India’s third-largest software services exporter Wipro on Friday cited global economic uncertainty as a major concern and said it expected only a modest 2% sequential growth in revenue for its IT services business during the July-September quarter.
For the first quarter of FY09, Wipro’s mainstay IT services business recorded a revenue of Rs 4,404.5 crore, showing a quarter on quarter growth of 6.9%, similar to that of Infosys and higher than TCS.
Significantly, perhaps for the first time, Wipro saw a degrowth in headcount addition during the first three months of the fiscal even as it bettered larger rivals TCS and Infosys in sequential revenue growth rate in dollar terms.
“With oil prices spiralling out of control, we continue to see a lot of uncertainty. Our focus is to retain close proximity with customers and partner with them in their business priorities,” Wipro chairman Azim Premji said.
In dollar terms, Wipro’s IT services business grew by 3.5% compared with 1.1% for Infosys and 0.3% for TCS. Wipro had provided a revenue guidance of $1,060 million for the first quarter, achieving $1,067 million.
Following organisational restructuring during the last fiscal, Wipro has divided its IT business into services and products. However, for the second quarter of the current fiscal, Wipro said it expected revenue at its IT services segment to grow 2% sequentially. In comparison, city-based rival Infosys has projected a 6% rise in topline.
“We think it will be a short-term blip and the second half of the fiscal will be better than the first half. Any slowdown has historically been helpful towards offshoring and that is our belief,” Girish Paranjpe, a joint CEO of Wipro’s IT business, said.
Suresh Vaswani, also a joint CEO of the IT business, was of the view that “it (slowdown) is a great opportunity for players to engage in the transformational side of the business and we are investing in a global programme in helping our customers.”
On a consolidated basis, including its consumer care & lighting and IT products businesses, Wipro reported a 43% year-on-year increase in revenue to Rs 5,966.8 crore while net profit was up by a fourth to Rs 907.8 crore.
The Wipro scrip closed at Rs 365.55 on BSE on Friday, showing a decline of 3.75% even as the benchmark Sensex gained nearly 4%. Though the first quarter did not see any major improvement in operating margins or buoyancy in the pricing environment, CFO Suresh Senapaty said price realisation had gone up by 3% Q-o-Q due to better price negotiation, newer customers coming at higher price, improved realisation on fixed price projects and better value offerings.
Wipro officials said the pricing environment is expected to remain stable for rest of the fiscal. On forex hedging, Wipro recorded a loss of Rs 67 crore during the quarter, though it added that it had a net gain of 0.1% on its operating profit.
For the first quarter of FY09, Wipro’s mainstay IT services business recorded a revenue of Rs 4,404.5 crore, showing a quarter on quarter growth of 6.9%, similar to that of Infosys and higher than TCS.
Significantly, perhaps for the first time, Wipro saw a degrowth in headcount addition during the first three months of the fiscal even as it bettered larger rivals TCS and Infosys in sequential revenue growth rate in dollar terms.
“With oil prices spiralling out of control, we continue to see a lot of uncertainty. Our focus is to retain close proximity with customers and partner with them in their business priorities,” Wipro chairman Azim Premji said.
In dollar terms, Wipro’s IT services business grew by 3.5% compared with 1.1% for Infosys and 0.3% for TCS. Wipro had provided a revenue guidance of $1,060 million for the first quarter, achieving $1,067 million.
Following organisational restructuring during the last fiscal, Wipro has divided its IT business into services and products. However, for the second quarter of the current fiscal, Wipro said it expected revenue at its IT services segment to grow 2% sequentially. In comparison, city-based rival Infosys has projected a 6% rise in topline.
“We think it will be a short-term blip and the second half of the fiscal will be better than the first half. Any slowdown has historically been helpful towards offshoring and that is our belief,” Girish Paranjpe, a joint CEO of Wipro’s IT business, said.
Suresh Vaswani, also a joint CEO of the IT business, was of the view that “it (slowdown) is a great opportunity for players to engage in the transformational side of the business and we are investing in a global programme in helping our customers.”
On a consolidated basis, including its consumer care & lighting and IT products businesses, Wipro reported a 43% year-on-year increase in revenue to Rs 5,966.8 crore while net profit was up by a fourth to Rs 907.8 crore.
The Wipro scrip closed at Rs 365.55 on BSE on Friday, showing a decline of 3.75% even as the benchmark Sensex gained nearly 4%. Though the first quarter did not see any major improvement in operating margins or buoyancy in the pricing environment, CFO Suresh Senapaty said price realisation had gone up by 3% Q-o-Q due to better price negotiation, newer customers coming at higher price, improved realisation on fixed price projects and better value offerings.
Wipro officials said the pricing environment is expected to remain stable for rest of the fiscal. On forex hedging, Wipro recorded a loss of Rs 67 crore during the quarter, though it added that it had a net gain of 0.1% on its operating profit.
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